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Understanding MillerKnoll’s Newly Added Risk Factors

MillerKnoll (NASDAQ:MLKN), formerly known as Herman Miller, is an American company based in Zeeland, Michigan. The firm makes and sells office furniture, equipment, and home furnishings all over the world.

Let’s look at the company’s financials to see what has changed in terms of its risk indicators.

Q2 Financial Results

Net revenues climbed 63.9% to $1.03 billion on a year-over-year basis. Meanwhile, earnings came in at $0.51 per share, down 42.7% year-over-year.

Orders surged 83.9% year-over-year to $1.2 billion in the second quarter.

In July, the business completed the purchase of Knoll. During the quarter, MillerKnoll stated that the integration of the Knoll purchase is on track, with cost savings of $100 million expected within two years of closure and $120 million by the end of year three.

The company’s upcoming earnings report is expected to be released on March 29.

MillerKnoll Risk Factors

According to the new Tipranks’ Risk Factors tool, MillerKnoll’s main risk category is Production, which accounts for 36% of the total 25 risks identified. The next two major MillerKnoll risks come under Finance & Corporate and Macro & Political categories, which stand at 28% and 20%, respectively.

The organization has added one new risk under the Production category.

MillerKnoll notes that labor shortages have occurred across the company’s activities and in specific areas, notably among plant production personnel. The firm’s expenses may rise as a result of labor scarcity, as the company will have to pay more for third-party services. Additionally, some temporary measures, such as recruiting and referral incentive schemes, exacerbate the problem.

The business warns investors that if the shortages continue for an extended length of time, it will have a major negative impact on its operational performance.

The Production risk factor’s sector average is 19.5%, compared to MillerKnoll’s 36%.

Wall Street’s Take

Turning to Wall Street, the stock has a Moderate Buy consensus rating based on 2 unanimous Buys. The average MLKN price target of $58.50 implies 58.5% upside potential to current levels.

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